SAN FRANCISCO -- The explosion of data and staggering energy costs faced by most enterprises are creating the need for modernized datacenters, and Hewlett-Packard is concentrating on this market, Ann Livermore, HP's executive vice president, told a packed hall here at Oracle OpenWorld 2008.

"By 2010, more than one-third of CEOs and CIOs say their current datacenter will be unable to meet growing demands, and 51 percent today say they have an urgent need to transform and modernize their datacenter," Livermore said.

HP (NYSE: HPQ) is investing in cloud computing and virtualization to help transform the datacenter, and investing in green technologies to help customers cut the costs of running their infrastructure.

Many of its technologies come out of its own experience, Livermore said, making HP the latest major tech vendor to take a page from of its own playbook, following the steps of IBM, Oracle and a slew of others.

HP "has been on a journey the last three years transforming our own datacenters because they needed it, and we're implementing and using our own products," Livermore said.

HP, which has teamed up with Intel and Yahoo to build cloud computing laboratories, has invested "significantly" in cloud computing technologies in particular, Livermore said. While its blade and x86 technologies are "very popular," its recently unveiled Performance Optimized Datacenters, or PODs, are important, she added.

A POD is a 40-foot shipping container with up to 22 racks of servers inside, creating a "very scalable, flexible environment," Livermore said. They're being purchased by cloud service providers as part of their datacenters, and HP has had interest from "a few financial institutions," according to Livermore.

Over the past four to five years, HP has pumped cash into technologies that enable enterprises to move from standalone assets into virtualized pools, Livermore said. These include software, services, storage, servers and automation, virtualization and management technologies.

HP is also putting money into technologies that will lower the power and cooling requirements for datacenters. "We believe we'll be able to create technologies that reduce the datacenter's carbon footprint by about 75 percent," Livermore said. HP is also working on replacing copper wiring in servers with a laser light beam, according to Livermore.

When it comes to the modernized datacenter, HP walks the talk -- over the past three years, it has consolidated 85 datacenters into six, and more than 16,000 applications to 6,000. Its revamped datacenters also gave it 250 percent more compute power with 40 percent fewer servers. The company "did all this in a bladed environment where we can dynamically shift workloads," Livermore said.

The savings have let HP spend its money more profitably. "Instead of two-thirds of our spending going to maintenance and operation, we now have two-thirds going to innovation," Livermore said.

The news also signals that HP is hopping on the green bandwagon in earnest.

IBM (NYSE: IBM), for instance, has made no secret of its success in consolidating datacenters and hardware -- last year, it said it was working to consolidate about 3,900 servers onto about 30 mainframes, while over the past decade it consolidated its datacenters from 155 to seven. These days, Big Blue is also focusing on initiatives like telecommuting, datacenter power monitoring and developing ways to cut enterprise energy costs with automated datacenter controls.

Just last month, Oracle (NASDAQ: ORCL) showed that it was also clued into the green craze, talking up its own efforts at cutting costs through revamping its datacenter operations. The company said it consolidated more than 40 datacenters to three.